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Thursday, 11 June 1970

Mr SPEAKER - Is leave granted? There being no objection, leave is granted.

Mr DOBIE - In each year since 1952, particular attention has been directed by your Committee to an examination of the Estimates and related expenditure performances of the departments of the administration. Because an inadequate standard of estimating has wide ramifications, it has not only been excess spending that has attracted our attention but also the excess provision of funds. Such overprovisions have been highlighted as undesirable, miselading and perhaps unfair to other departments whose financial needs might not have been met fully. At the same time, as the 118th Report shows, there are cases where expenditure variations from the Estimates are acceptable because they have arisen from circumstances that could not have been reasonably foreseen when the Estimates were formulated, or have arisen from other factors wholly beyond the control of the departments concerned. However, evidence taken in this inquiry revealed that certain departments have sought funds prematurely in the original appropriations either because they have failed to be guided by their own experience in the areas where expenditure is to occur, or because they have applied for funds without making a reasonably based assessment of the expenditure that might be involved.

In these circumstances your Committee believes it is timely for departments to be reminded again of the principles relating to estimating that have been formulated by the Department of the Treasury and endorsed by your Committee. These principles are:

1.   Each individual estimate should represent a realistic assessment of the amount that is expected to be spent during the financial year, having regard to the information available to the department when the estimate is formulated.

2.   Estimates should not include amounts for proposals that are so far from firm that it is not possible to know what payments, if any, will be made during the financial year.

3.   Where an item relates to a recurring expense such as office services and travelling expenses, the estimate should be formulated on the basis of experience, wisely evaluated.

4.   Estimates for supplies and services must be based on current costs. No provision or margin should be included for possible increases in those costs.

5.   All continuing expenditure in particular must be closely examined in order to eliminate items that are no longer required.

The importance of skilful estimating by all concerned cannot be over-emphasised.

The 118th report shows that there were shortfalls in expenditure which arose from delays in the placing of orders, administrative laxity, misunderstandings and clerical errors. Your Committee hopes that all departments will remain vigilant to ensure that problems of this nature are minimised. Your Committee would also invite attentionto the fact that some witnesses appeared before us inadequately briefed on matters of fact referred to in departmental submissions. This is time wasting and we would hope that the Secretary of the Public Service Board will again circularise ail

Permanent Heads regarding the importance of thorough briefing and accuracy of departmental submissions by those officers in departments who are likely to be concerned with the preparation of material for us or who may be required to appear in person at future public hearings. We would remind the Parliament that under the provisions of its establishing Act, your Joint Committee of Public Accounts does have very wide terms of reference, independence of action and the requirement to report directly to the Parliament itself. We believe that the work of the Public Accounts Committee over the past 17 years has been a significant factor in ensuring that the Parliament has the means of maintaining an appropriate role in the financial administration of the Commonwealth. I commend the Reports to honourable members for personal reading and move that they be printed.

Ordered that the Reports be printed.

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